Question 1

In the aggregate demand and aggregate supply model, the point where the aggregate demand curve crosses the long run aggregate supply curve, and the expected price level equals the actual price level, is known as what?

Accepted Answer

Long run e...

Question 2

Refer to U.S. Financial Crisis. What would happen in the market for foreign-currency exchange?

Accepted Answer

A)   the supply of dollars would shift right and the exchange rate would rise.
B)   the supply of dollars would shift right and the exchange rate would fall.
C)   the supply of dollars would shift left and the exchange rate would rise.
D)   None of the above is correct.E) B) and C)
F) None of the above

Question 3

A change in the money supply changes only nominal variables in the long run.

Accepted Answer

A) True 
 B)False

Question 4

Other things the same, the aggregate quantity of output supplied will increase if the price level

Accepted Answer

A)   is lower than expected so that firms believe the relative price of their output has increased.
B)   is lower than expected so that firms believe the relative price of their output has decreased.
C)   is higher than expected so that firms believe the relative price of their output has increased.
D)   is higher than expected so that firms believe the relative price of their output has decreased.E) A) and C)
F) A) and B)

Question 5

Explain how a recession differs from a depression.

Accepted Answer

Recessions are relatively mild...

Question 6

If the dollar appreciates, perhaps because of speculation or government policy, then U.S. net exports

Accepted Answer

A)   increase which shifts aggregate demand right.
B)   increase which shifts aggregate demand left.
C)   decrease which shifts aggregate demand right.
D)   decrease which shifts aggregate demand left.E) None of the above
F) A) and B)

Question 7

Optimism
Imagine that the economy is in long-run equilibrium. Then, perhaps because of improved international relations and increased confidence in policy makers, people become more optimistic about the future and stay this way for some time.
-Refer to Optimism. Which curve shifts and in which direction?

Accepted Answer

A)   aggregate demand shifts right
B)   aggregate demand shifts left
C)   aggregate supply shifts right.
D)   aggregate supply shifts left.E) A) and D)
F) A) and C)

Question 8

Which of the following shifts short-run, but not long-run aggregate supply right?

Accepted Answer

A)   a decrease in the actual price level
B)   a decrease in the expected price level
C)   a decrease in the capital stock
D)   an increase in the money supplyE) A) and B)
F) All of the above

Question 9

Figure 33-7. 
-Refer to Figure 33-7. If the economy starts at Y, then a recession occurs at

Accepted Answer

A)   V.
B)   W.
C)   X.
D)   Z.E) A) and D)
F) B) and C)

Question 10

When the dollar depreciates, each dollar buys

Accepted Answer

A)   more foreign currency, and so buys more foreign goods.
B)   more foreign currency, and so buys fewer foreign goods.
C)   less foreign currency, and so buys more foreign goods.
D)   less foreign currency, and so buys fewer foreign goods.E) A) and B)
F) A) and C)

Question 11

The classical dichotomy refers to the separation of

Accepted Answer

A)   prices and nominal interest rates.
B)   taxes and government spending.
C)   decisions made by the public and decisions made by the government.
D)   real and nominal variables.E) B) and D)
F) A) and B)

Question 12

Other things the same, the aggregate quantity of goods demanded decreases if

Accepted Answer

A)   real wealth falls.
B)   the interest rate rises.
C)   the dollar appreciates.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 13

The sticky-price theory helps explain what feature of the aggregate demand and aggregate supply model?

Accepted Answer

why the short run ag...

Question 14

In 1936, John Maynard Keynes published a book, The General Theory, which attempted to explain

Accepted Answer

A)   stagflation.
B)   the classical dichotomy.
C)   short-run economic fluctuations.
D)   how changes in the money supply had created the Great Depression.E) C) and D)
F) None of the above

Question 15

Figure 33-4 
-Refer to Figure 33-4. If the economy is at A and there is a fall in aggregate demand, in the short run the economy

Accepted Answer

A)   stays at A.
B)   moves to B.
C)   moves to C.
D)   moves to D.E) B) and C)
F) B) and D)

Question 16

Other things the same, technological progress raises the price level.

Accepted Answer

A) True 
 B)False

Question 17

Who said about classical economic theory: "the long run is a misleading guide to current affairs. In the long run we are all dead"?

Accepted Answer

The answer of Who said about classical economic theory: "the...

Question 18

The exchange-rate effect helps explain what feature in the aggregate demand and aggregate supply model?

Accepted Answer

why the ag...

Question 19

The mathematical equation: quantity of output supplied = natural rate of output + aactual price level - expected price level) , expresses

Accepted Answer

A)   how the long run equilibrium adjusts to changes in money supply.
B)   how output deviates in the short run from its long run natural rate.
C)   how the short run aggregate supply curve shifts.
D)   how adverse shifts in aggregate supply can cause stagflation.E) B) and C)
F) B) and D)

Question 20

The aggregate demand and aggregate supply model helps us to understand both short-run economic fluctuations and how the economy moves from the short to the long run.

Accepted Answer

A) True 
 B)False

Exam 15: Aggregate Demand and Aggregate Supply

The classical dichotomy refers to the separation of

Correct Answer
verified

The aggregate demand and aggregate supply model helps us to understand both short-run economic fluctuations and how the economy moves from the short to the long run.

Correct Answer
verified

Other things the same, technological progress raises the price level.

Correct Answer
verified

If the dollar appreciates, perhaps because of speculation or government policy, then U.S. net exports

Correct Answer
verified

In 1936, John Maynard Keynes published a book, The General Theory, which attempted to explain

Correct Answer
verified

Correct Answer
verified

Figure 33-4 -Refer to Figure 33-4. If the economy is at A and there is a fall in aggregate demand, in the short run the economy

Correct Answer
verified

When the dollar depreciates, each dollar buys

Correct Answer
verified

The sticky-price theory helps explain what feature of the aggregate demand and aggregate supply model?

Correct Answer
verified
why the short run ag...
View Answer

Other things the same, the aggregate quantity of output supplied will increase if the price level

Correct Answer
verified

A change in the money supply changes only nominal variables in the long run.

Correct Answer
verified

Who said about classical economic theory: "the long run is a misleading guide to current affairs. In the long run we are all dead"?

Correct Answer
verified

Explain how a recession differs from a depression.

Correct Answer
verified
Recessions are relatively mild...
View Answer

Which of the following shifts short-run, but not long-run aggregate supply right?

Correct Answer
verified

Other things the same, the aggregate quantity of goods demanded decreases if

Correct Answer
verified

Refer to U.S. Financial Crisis. What would happen in the market for foreign-currency exchange?

Correct Answer
verified

The exchange-rate effect helps explain what feature in the aggregate demand and aggregate supply model?

Correct Answer
verified
why the ag...
View Answer

In the aggregate demand and aggregate supply model, the point where the aggregate demand curve crosses the long run aggregate supply curve, and the expected price level equals the actual price level, is known as what?

Correct Answer
verified
Long run e...
View Answer

Figure 33-7. -Refer to Figure 33-7. If the economy starts at Y, then a recession occurs at

Correct Answer
verified

The mathematical equation: quantity of output supplied = natural rate of output + aactual price level - expected price level) , expresses

Correct Answer
verified

Exam 15: Aggregate Demand and Aggregate Supply

The classical dichotomy refers to the separation of

Correct AnswerverifiedShow Answer

The aggregate demand and aggregate supply model helps us to understand both short-run economic fluctuations and how the economy moves from the short to the long run.

Correct AnswerverifiedShow Answer

Other things the same, technological progress raises the price level.

Correct AnswerverifiedShow Answer

If the dollar appreciates, perhaps because of speculation or government policy, then U.S. net exports

Correct AnswerverifiedShow Answer

In 1936, John Maynard Keynes published a book, The General Theory, which attempted to explain

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 33-4 -Refer to Figure 33-4. If the economy is at A and there is a fall in aggregate demand, in the short run the economy

Correct AnswerverifiedShow Answer

When the dollar depreciates, each dollar buys

Correct AnswerverifiedShow Answer

The sticky-price theory helps explain what feature of the aggregate demand and aggregate supply model?

Correct Answerverifiedwhy the short run ag...View AnswerShow Answer

Other things the same, the aggregate quantity of output supplied will increase if the price level

Correct AnswerverifiedShow Answer

A change in the money supply changes only nominal variables in the long run.

Correct AnswerverifiedShow Answer

Who said about classical economic theory: "the long run is a misleading guide to current affairs. In the long run we are all dead"?

Correct AnswerverifiedShow Answer

Explain how a recession differs from a depression.

Correct AnswerverifiedRecessions are relatively mild...View AnswerShow Answer

Which of the following shifts short-run, but not long-run aggregate supply right?

Correct AnswerverifiedShow Answer

Other things the same, the aggregate quantity of goods demanded decreases if

Correct AnswerverifiedShow Answer

Refer to U.S. Financial Crisis. What would happen in the market for foreign-currency exchange?

Correct AnswerverifiedShow Answer

The exchange-rate effect helps explain what feature in the aggregate demand and aggregate supply model?

Correct Answerverifiedwhy the ag...View AnswerShow Answer

In the aggregate demand and aggregate supply model, the point where the aggregate demand curve crosses the long run aggregate supply curve, and the expected price level equals the actual price level, is known as what?

Correct AnswerverifiedLong run e...View AnswerShow Answer

Figure 33-7. -Refer to Figure 33-7. If the economy starts at Y, then a recession occurs at

Correct AnswerverifiedShow Answer

The mathematical equation: quantity of output supplied = natural rate of output + aactual price level - expected price level) , expresses

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
why the short run ag...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Recessions are relatively mild...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
why the ag...
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Correct Answer
verified
Long run e...
View Answer

Correct Answer
verified

Correct Answer
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